The price of a pen is increased by 45% and the number of pens bought is decreased by 25%. By what percentage does the amount spent on pens change?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → 8.75% increase
Amount spent \(=\) price \(\times\) quantity, so the two changes multiply.
New price \(=1.45\) times; new quantity \(=0.75\) times
New spending \(=1.45\times0.75=1.0875\) times the old spending
Change \(=1.0875-1=0.0875=8.75\%\) increase
The amount spent increases by 8.75%.